With Windows Vista’s public perception in shambles and most IT departments stubbornly refusing to adopt it, has the time come for an early post-mortem on Vista? Here are the top five reasons why Vista has failed. Hint: Most of them aren’t technical.

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On Friday, Microsoft gave computer makers a six-month extension for offering Windows XP on newly-shipped PCs. While this doesn’t impact enterprise IT — because volume licensing agreements will allow IT to keep installing Windows XP for many years to come — the move is another symbolic nail in Vista’s coffin.

The public reputation of Windows Vista is in shambles, as Microsoft itself tacitly acknowledged in its Mojave ad campaign.

IT departments are largely ignoring Vista. In June (18 months after Vista’s launch), Forrester Research reported that just 8.8% of enterprise PCs worldwide were running Vista. Meanwhile, Microsoft appears to have put Windows 7 on an accelerated schedule that could see it released in 2010. That will provide IT departments with all the justification they need to simply skip Vista and wait to eventually standardize on Windows 7 as the next OS for business.

So how did Vista get left holding the bag? Let’s look at the five most important reasons why Vista failed.

5. Apple successfully demonized Vista

Apple’s clever I’m a Mac ads have successfully driven home the perception that Windows Vista is buggy, boring, and difficult to use. After taking two years of merciless pummeling from Apple, Microsoft recently responded with it’s I’m a PC campaign in order to defend the honor of Windows. This will likely restore some mojo to the PC and Windows brands overall, but it’s too late to save Vista’s perception as a dud.

4. Windows XP is too entrenched

In 2001, when Windows XP was released, there were about 600 million computers in use worldwide. Over 80% of them were running Windows but it was split between two code bases: Windows 95/98 (65%) and Windows NT/2000 (26%), according to IDC. One of the big goals of Windows XP was to unite the Windows 9x and Windows NT code bases, and it eventually accomplished that.

In 2008, there are now over 1.1 billion PCs in use worldwide and over 70% of them are running Windows XP. That means almost 800 million computers are running XP, which makes it the most widely installed operating system of all time. That’s a lot of inertia to overcome, especially for IT departments that have consolidated their deployments and applications around Windows XP.

And, believe it or not, Windows XP could actually increase its market share over the next couple years. How? Low-cost netbooks and nettops are going to be flooding the market. While these inexpensive machines are powerful enough to provide a solid Internet experience for most users, they don’t have enough resources to run Windows Vista, so they all run either Windows XP or Linux. Intel expects this market to explode in the years ahead. (For more on netbooks and nettops, see this fact sheet and this presentation — both are PDFs from Intel.)

3. Vista is too slow

For years Microsoft has been criticized by developers and IT professionals for “software bloat” — adding so many changes and features to its programs that the code gets huge and unwieldy. However, this never seemed to have enough of an effect to impact software sales. With Windows Vista, software bloat appears to have finally caught up with Microsoft.

Vista has over 50 million lines of code. XP had 35 million when it was released, and since then it has grown to about 40 million.  This software bloat has had the effect of slowing down Windows Vista, especially when it’s running on anything but the latest and fastest hardware. Even then, the latest version of Windows XP soundly outperforms the latest version of Microsoft Vista. No one wants to use a new computer that is slower than their old one.

2. There wasn’t supposed to be a Vista

It’s easy to forget that when Microsoft launched Windows XP it was actually trying to change its OS business model to move away from shrink-wrapped software and convert customers to software subscribers. That’s why it abandoned the naming convention of Windows 95, Windows 98, and Windows 2000, and instead chose Windows XP.

The XP stood for “experience” and was part of Microsoft’s .NET Web services strategy at the time. The master plan was to get users and businesses to pay a yearly subscription fee for the Windows experience — XP would essentially be the on-going product name but would include all software upgrades and updates, as long as you paid for your subscription. Of course, it would disable Windows on your PC if you didn’t pay. That’s why product activation was coupled with Windows XP.

Microsoft released Windows XP and Office XP simultaneously in 2001 and both included product activation and the plan to eventually migrate to subscription products. However, by the end of 2001 Microsoft had already abandoned the subscription concept with Office, and quickly returned to the shrink-wrapped business model and the old product development model with both products.

The idea of doing incremental releases and upgrades of its software — rather than a major shrink-wrapped release every 3-5 years — was a good concept. Microsoft just couldn’t figure out how to make the business model work, but instead of figuring out how to get it right, it took the easy route and went back to an old model that was simply not very well suited to the economic and technical realities of today’s IT world.

1. It broke too much stuff

One of the big reasons that Windows XP caught on was because it had the hardware, software, and driver compatibility of the Windows 9x line plus the stability and industrial strength of the Windows NT line. The compatibility issue was huge. Having a single, highly-compatible Windows platform simplified the computing experience for users, IT departments, and software and hardware vendors.

Microsoft either forgot or disregarded that fact when it released Windows Vista, because, despite a long beta period, a lot of existing software and hardware were not compatible with Vista when it was released in January 2007. Since many important programs and peripherals were unusable in Vista, that made it impossible for a lot of IT departments to adopt it. Many of the incompatibilities were the result of tighter security.

After Windows was targeted by a nasty string of viruses, worms, and malware in the early 2000s, Microsoft embarked on the Trustworthy Computing initiative to make its products more secure. One of the results was Windows XP Service Pack 2 (SP2), which won over IT and paved the way for XP to become the world’s mostly widely deployed OS.

The other big piece of Trustworthy Computing was the even-further-locked-down version of Windows that Microsoft released in Vista. This was definitely the most secure OS that Microsoft had ever released but the price was user-hostile features such as UAC, a far more complicated set of security prompts that accompanied many basic tasks, and a host of software incompatibility issues. In order words, Vista broke a lot of the things that users were used to doing in XP.

Bottom line

There are some who argue that Vista is actually more widely adopted than XP was at this stage after its release, and that it’s highly likely that Vista will eventually replace XP in the enterprise. I don’t agree. With XP, there were clear motivations to migrate: bring Windows 9x machines to a more stable and secure OS and bring Windows NT/2000 machines to an OS with much better hardware and software compatibility. And, you also had the advantage of consolidating all of those machines on a single OS in order to simplify support.

With Vista, there are simply no major incentives for IT to use it over XP. Security isn’t even that big of an issue because XP SP2 (and above) are solid and most IT departments have it locked down quite well. As I wrote in the article Prediction: Microsoft will leapfrog Vista, release Windows 7 early, and change its OS business, Microsoft needs to abandon the strategy of releasing a new OS every 3-5 years and simply stick with a single version of Windows and release updates, patches, and new features on a regular basis. Most IT departments are essentially already on a subscription model with Microsoft so the business strategy is already in place there.

As far as the subscription model goes for small businesses and consumers, instead of disabling Windows on a user’s PC if they don’t renew their subscription, just don’t allow that machine to get any more updates until they renew. Microsoft could also work with OEMs to sell something like a three-year subscription to Windows with every a new PC. Then users would have the choice of renewing on their own after that.

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